New eRate chiefs inspire optimism

Cara Branigan, Associate Editor

March 1st, 2004

Leadership changes at the U.S. House Energy and Commerce Committee and the Universal Service Administrative Co. (USAC) are likely to have a positive impact on the $2.25 billion-a-year federal eRate program, according to knowledgeable education advocates.

The departure of a strident eRate opponent in the House and the arrival of an experienced eRate administrator at USAC are causes for optimism, insiders say.

Rep. Billy Tauzin, R-La., on Feb. 3 announced his decision to resign as chairman of the House Energy and Commerce Committee, effective Feb. 16, after being hospitalized for health problems. A long-time critic of the eRate, which provides discounts on telecommunications services to eligible schools and libraries, Tauzin initiated a probe into the eRate last March after a report from the Center for Public Integrity called the program “honeycombed with fraud and financial shenanigans.”

Rep. Joe Barton, R-Texas, not generally considered an opponent of the eRate, is pegged to be the next chairman of the committee. Barton did not return an eSchool News reporter’s telephone calls by press time.

Committee spokesman Ken Johnson said he doubts the change in leadership will have any impact on the committee’s investigations, because the probe is being overseen by Rep. Jim Greenwood, R-Pa., chairman of the Subcommittee on Oversight and Investigations.

“We are knee-deep in investigations, and we plan to hold hearings this spring,” Johnson said.

eRate insiders say they are interested to see the tone of the remainder of the investigations and the hearings after Tauzin’s departure.

“It’s going to show us: Was this a personal vendetta of Tauzin, or was this a clear concern of the committee?” said Gary Rawson, infrastructure planning and eRate coordinator for Mississippi’s Information Technology Services department and chairman of the State eRate Coordinator Alliance, which is sponsored by the Council of Chief State School Officers.

Sara Fitzgerald, vice president of communications for eRate consulting firm Funds for Learning LLC, said she believes that if the hearings go forward, they will be “a temperate, reasonable look at the program” now that Tauzin is no longer involved.

USAC, the agency that administers the eRate, also will have new leadership. In January, Federal Communications Commission (FCC) Chairman Michael Powell named Lisa Zaina, former senior legal advisor for FCC Commissioner Jonathan Adelstein, to replace Cheryl Parrino as USAC’s chief executive.

It’s too soon to know what impact Zaina’s leadership will have on the eRate, said Mel Blackwell, a spokesman for USAC’s Schools and Libraries Division (SLD), because she doesn’t start until March 1.

But, he added, “I think the overall impact will be great. She understands the program. She knows the program. She has worked with the program. I think she is a tremendous addition and will make a seamless transition.”

Fitzgerald said: “I think the fact they turned to an FCC person is good and will continue a good working relationship between the FCC and USAC.”

Critical juncture

The two changes in leadership come at a critical juncture for the eRate, as House investigators prepare to release the findings of their probe.

In mid-January, the House Commerce Committee discovered that about $5 million worth of computer and telecommunications equipment bought for Chicago schools with eRate dollars has languished in a warehouse for years. “Instances like that have prompted us to further our investigations,” committee spokesman Johnson said (see sidebar).

The eRate also received low marks for planning (11 percent), management (27 percent), and results accountability (7 percent), according to a federal performance evaluation released Feb. 2 as part of President Bush’s fiscal year 2005 budget request.

In its evaluation of the program, the U.S. Office of Management and Budget (OMB) found that “sufficient performance data from funding recipients are not regularly collected.” Other problems cited include a lack of third-party evaluations of the program and long-term, outcome-oriented performance goals. In the “purpose” category, however, the eRate received a grade of “A.”

In response to these findings, the FCC has been asked to develop annual outcome and efficiency measures and to work with the U.S. Department of Education to develop additional evaluations of the program.

“Not knowing how they arrived at the results, I really couldn’t comment on” the OMB’s evaluation, Blackwell said.

The Education and Libraries Network Coalition (EdLiNC), a group that represents several public and private school associations and the American Library Association, disagreed with the OMB’s assertion that the eRate has not demonstrated results.

“Prior to the creation of the eRate program, few of our nation’s classrooms and libraries were connected to the internet, which has become an indispensable information source and teaching and learning tool,” EdLiNC said. “Now, after six years of the eRate program, 92 percent of America’s public school classrooms and 95 percent of its libraries are connected to the internet.”

As for independent research, EdLiNC’s most recent report, “eRate: A Vision of Opportunity and Innovation,” provides detailed case studies of 39 of the thousands of communities in America that have used eRate funds, the group noted.

Other program news

In other eRate news, the public has until March 11 to submit comments regarding additional proposed changes to the program. A new “Notice of Proposed Rulemaking,” first announced in December by the FCC, was published in the Federal Register Feb. 10.

The FCC is seeking feedback on whether (and how) it should change the current discount matrix used to determine an applicant’s discount level; impose a limit on the total funding an applicant can request each year; and modify competitive-bidding procedures and the definitions of rural applicants, internet access, and leased wide-area networks, among other issues.

Also, the SLD said it would not fulfill any more funding requests for internal connections for Funding Year 2003 until after March 1 to give applicants a full year to use the money. eRate rules say that applicants who receive funding commitment letters after March 1 get an automatic one-year extension of the deadline by which funds must be spent. The SLD also did this last year. “That’s part of listening to our customers,” Blackwell said.

As schools and libraries raced to complete their 2004 eRate applications before the Feb. 4 deadline, USAC reported that it currently has $100 million in unused funding available to roll over for the 2004 program year. That figure is in addition to the $420 million that has been rolled over from previous years to support additional funding commitments for 2003.

Finally, a number of school applicants who failed to comply with the Children’s Internet Protection Act (CIPA) before the start of the 2002 program year–July 1, 2002–have been asked to return a portion of their 2002 eRate funds. CIPA requires schools and libraries receiving eRate discounts to use a “technology protection measure” to shield children from inappropriate content online.

The Morris Catholic High School in Denville, N.J., which was asked to return $526.05, did not comply with the law until Aug. 12, 2002, and Queen of Peace High School in North Arlington, N.J., which was asked to return $1,036.27, did not comply until Jan. 14, 2003, SLD officials said. Both schools reportedly had certified that they were in compliance with CIPA before the start of the 2002 program year.